Pub. 9 2019-2020 Issue 3

12 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S www.coloradobankers.org CBA Associate Member Cirrus Lender Services Pens White Paper Analyzing Activity-based Costing T oday’s competitive environment compels lenders to find ways to optimize their spending while efficiently delivering services that enhance the client experience. o achieve this objective, lenders need to improve their understanding of how even small obstacles in their daily workflow can drive up costs. Based on our deep experience with several leading lenders, this paper sets out to address principles that are being followed as they seek to maximize economic value. Many organizations do not have a full picture of where their money goes. Although it is easy to identify and define payroll expenses, lenders rarely take the next step of identifying the underlying granular time required for specific tasks by job role. Mapping human capital spend to core processes, activities, and tasks can deliver a competitive advantage for those willing to invest the time in some basic analysis. Activity-Based Costing, also known as ABC, is a method of assigning costs to everyday activ ities within your organization. This can include processes, products, services, customers, and lines of daily business. ABC is based on the idea that the efforts required to produce products and services can be quantified and assigned to that product or service. Much like a Bill of Materials, services are delivered through an implicit “recipe” of components that are required to deliver the service to clients. ABC analysis transforms that recipe into a quantified, explicit view that enables better- informed management decisions. ABC analysis enabled a commercial lending team to double their production within a $6 billion regional bank: “Prior toCirrus, our packaging/closing teamspent an average of 1-hour creating checklists and sending them off to the client, 6 hours managing the checklists and updating them as the deal progressed, and 9 hours renaming files to our standard. After Cirrus, this was reduced to about 45 minutes creating a checklist and sending it off to the client, and < 1 hour managing the checklist and updating them as the deal progressed, and no time spent renaming the file to our standard. Savings: ~15 hours per file.” - Mark Abell, NBH Bank Access the full white paper at https://www.coloradobankers. org/resource/resmgr/communications/Cirrus_ABC_White_ Paper.pdf n About Cirrus Lender Services Cirrus provides lenders a secure document portal to collect and organize confidential documents in the cloud or on a local server. The portal then automates tasks, so that teams can collaborate efficiently, eliminating the common problemof “loan document collection chaos”. For bankers who have experienced the frustration of renaming files, searching subfolders for amissing document, or listening to a borrower complain that they’ve already submitted that rent roll, PFS, or tax return, Cirrus is worth examining closely. www.cirrusls.com